|Year||$||$ change||€||€ change|
Sources: FRED and US Dept. of Energy. I used data closest to May first, to prevent seasonal factors from mattering. Data is nominal, as inflation differentials are an order of magnitude smaller than the changes we see here (which are %age changes from 2000).
What do I read from this first table? That more than half of the increase in the dollar denominated price of crude oil is due to the weakness of the dollar, and less than half to the actual increase of oil prices. So much for blaming China and India, the real culprit is the US dollar. But crude oil prices are not really what matters to an economy, it is rather the price of the end product, the gas that fuels engines. So let us look at the price for a gallon of gas, around May first, in the United States and in Germany, the largest European economy.
|Year||US $||US $ change||Germ. €||Germ. € change||Germ. $||Germ. $ change|
Sources: FRED and US Dept. of Energy.
We can see clearly that gas prices have increased much less in Germany in euro terms than anywhere in dollar terms. Two thirds of the US increase can be attributed to the weak dollar.